NOTES TO THE FINANCIAL STATEMENTS l Note 34

34.

Segment report

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order to allocate resources to the segments and to assess their performance.

The Chief Operating Decision Maker has been identified as the executive directors of the Group.

On this basis, the Group has five operating segments:

Segment	Nature of business
Retail	– Retailers of tiles, brassware, laminated flooring, bathroomware, lighting products, other home finishing products and accessories.
Franchising	– Bearer of South African and non-South African trademarks.
Properties	– Property investments.
Supply and support services	– Distributor of tiles, shower enclosures, brassware, laminated flooring, accessories, and tiling tools.
	– Group administration, marketing and management services.
	– Outsourced debtor solutions.
	– Procurement.
Manufacturing	– Manufacturers of tiles, sanitaryware, baths, adhesive and related products.

All intersegmental transactions are concluded at arm’s length.

The following measures, as included in the quarterly management report reviewed by the Chief Operating Decision Maker, are used to assess performance.

(Rand millions unless otherwise stated)	Retail	Manu- facturing*	Supply and Support Services*	Fran- chising	Properties	Associates	Con- solidation	Total
For the year ended 30 June 2020
Turnover	3 442	3 736	1 835	–	–	–	(2 323)	6 690
From external customers^*	3 442	2 790	458	–	–	–	–	6 690
Intersegment	–	946	1 377	–	–	–	(2 323)	–
Turnover from franchise stores^**	2 568	–	–	–	–	–	(2 568)	–
Achieved gross margin	1 209	920	199	–	–	–	178	2 506
Depreciation	(45)	(214)	(20)	(2)	(80)	–	–	(361)
Impairment of plant and equipment	–	(16)	–	–	–	–	–	(16)
Profit on sale of property, plant and equipment	#	#	#	–	#	–	–	1
Trading profit	296	458	209^##	248^###	287	–	4	1 502
Finance income	8	40	60	#	18	–	(52)	74
Finance costs	#	(4)	(47)	–	(82)	–	52	(81)
Income from associates	–	–	–	–	–	1	–	1
BBBEE transaction charge	–	–	(39)	–	–	–	–	(39)
Profit before taxation	304	494	183	248	223	1	4	1 457
For the year ended 30 June 2019
Turnover	3 185	4 082	1 901	–	–	–	(2 193)	6 975
From external customers^*	3 185	3 122	668	–	–	–		6 975
Intersegment	–	960	1 233	–	–	–	(2 193)	–
Turnover from franchise stores ^**	3 020	–	–	–	–	–	(3 020)	–
Achieved gross margin	1 155	1 043	186	–	–	–	188	2 572
Depreciation	(60)	(192)	(20)	#	(72)	–	–	(344)
Profit on sale of property, plant and equipment	–	1	1	–	12	–	–	14
Trading profit	333	607	264^##	281^##^#	308	–	4	1 797
Finance income	9	29	47	#	13	–	(27)	71
Finance costs	–	(5)	(13)		(61)	–	27	(52)
Income from associates	–	–	–	–	–	3	–	3
Profit before taxation	342	631	298	281	260	3	4	1 819

*	Turnover from external customers includes sales to franchise stores.
**	Franchise stores are not controlled by the Group.
^#	Less than R1 million.
^##	Includes franchise income of R89 million (2019: R94 million) disclosed in note 3.
^###	Includes royalty income of R129 million (2019: R152 million) disclosed in note 3.

(Rand millions unless otherwise stated)	South Africa	Rest of Africa	Australia	Inter-group entries	Group

Geographical analysis
Audited year to 30 June 2020
Turnover	7 802	726	485	(2 323)	6 690
Non-current assets	5 431	343	247	(1 209)	4 812
Audited year to 30 June 2019
Turnover	8 131	561	476	(2 193)	6 975
Non-current assets	4 915	232	235	(932)	4 450